The draft DTC along with the Discussion Paper was released in August, 2009 for public comments. The response from various stakeholders has been overwhelming and a number of valuable inputs have been received. CBDT has released the revised Discussion Paper on the draft Direct Taxes Code (DTC), which is being placed in the public domain to seek responses on the modified proposals.
Highlights of the New proposals are.
- MAT remain levied on the basis of Book profit and not as per Gross asset based.
- EEE(Exempt exempt continue on GPF,RPF,PPF,pension schemes adminstrated by pension fund Regulatory and development authority .Pure Life insurance produces and annuity schemes ,Plus product covered under EEE is also covered as EEE in new Direct tax code upto their present period.
- New ULIPs post DTC will not have EEE benefit. However, existing ULIPs will continue to get EEE benefit
- For employee : contribution up to a prescribed rate by employer to superannuation fund ,pension fund ,approved provident fund will not be added in employee's salary ,.
- Retirement benefit received by employee remain exempted up to prescribed limit.
- Valuation of perquisites will be notified at later stage but will be identical as per present rules.
- House property: deemed valuation @6 % of cost has been withdrawn ,Now tax is payable as per rent received .
- House loan Benefit up to 150000 remain in new direct tax code on self occupied house.
- Capital Gain: Taxable as normal Income and taxable as per slab of the person .
- Tax on equity : presently there is no tax on Equity holding period more than one year but now it is taxable .Now standard deduction(% ) will be given on a capital gain amount and balance is taxable as capital gain.
- Capital gain index base now shifted to 01.04.2000 so gain realised during 01.04.1981 to 01.04.2000 is now not taxable at all.
- No TDS on FII and FII income from investment in equity ,deemed to be capital gain only,
- Capital gain tax has been proposed on long term capital gain on Equity even then STT has not been withdrawn with a reason that this is not a tax on Income but a tax on transaction??? .
The major issues which have been addressed relate to
- Minimum Alternate Tax (MAT) on gross assets,
- Tax treatment of savings - Exempt Exempt Tax (EET) vis-a-vis Exempt Exempt Exempt (EEE) basis
- Status of Double Tax Avoidance Agreements vis-a-vis the domestic law
- Administration of the General Anti-avoidance Rule (GAAR),
- Taxation of income from house property on a presumptive basis,
- Tax treatment of capital gains and tax treatment of non-profit organizations, etc.
The response on the revised Discussion Paper may be submitted electronically on the website 'http://finmin.nic.in' or may be sent to e-mail address 'firstname.lastname@example.org' on or before 30th June, 2010.
To download new proposals right click on below link and selec "save target as" or "save link as " as the case may be .
Download revised discussion paper on direct tax code .
read direct Tax new proposals from here
tags:new direct tax code, revised direct tax code, direct tax code 2011, direct tax code 2.0, direct tax